Donald Trump unveiled a tax plan to “Make America Great Again” this morning with great enthusiasm. I share his enthusiasm because the plan would kick start our sluggish economy, create amazing opportunities for American workers, and simplify the tax code. Trump predicts this plan will create economic growth at between 3% and 6%. The details follow:
Reduce the number of tax brackets to four. The highest tax rate reduced from 39.6% to 25% imposed on married couples making more than $300,000 a year. The other brackets would have rates of 20%, 10% and zero
The alternative minimum tax and the death tax would also be gone.
Capital gains tax would be lowered from 23.8% to 20%
Trump also talked about trade, government waste, and inequitable free military protection for other nations.
The corporate tax rate would be lowered from 35% to 15%
The plan would grant a one-time repatriation of corporate cash held overseas at a discounted rate of 10 percent and an end to the deferral of taxes on corporate income earned abroad.
Major deductions and loop holes will end, including the carried interest loop hole that allows managers of hedge funds and private equity firms to pay a lower tax rate than “their secretaries!”
A cap on what businesses can deduct as expenses would also be phased in, according to the Trump blueprint. Trump leaves in place all current deductions for charitable giving and mortgage interest.
Expect mixed blow back from hard core liberals as well as his competition…the contest rolls on.